Non Region Specific Ski Town Real Estate

[newfydog]

In Canada seniors can defer most of their tax payments into a low interest lien held by the Provence. The Provence pays the municipality, and collects taxes upon sale of the home or death of the owner.

 

[socalgal]

The issue of property valuations, property taxation and retired peoples is a big deal sometimes. Seniors who have lived in their home for 30 or 40 years, raised a family, being forced out because they happened to have chosen wisely in a good area and have seen their homes appreciate a great deal. Now they have significant taxation burden and very little income to combat it. I don't know what the solution is. I think it's somewhat unethical to force seniors to leave their homes for this reason. I don't know how you build a system to prevent it without pissing off someone else.

That's why Prop 13 in CA is/was so popular.https://en.m.wikipedia.org/wiki/1978_California_Proposition_13

 

[Pat AKA mustski]

Interesting observations, one thing that might have an affect on the housing market is if inflation get very bad and people have to sell their second home in ski country. That might create an opportunity to get some real estate at a reduced rate if the inflation hasn't hurt you as bad as others.

Vacation homes are usually the first to drop in value and the last to go back up. There are a number of factors that play into that. STRs could absolutely crash if people cut back on travel which is likely if inflation gets out of hand. Investors who are dependent on that income to pay mortgages start dumping property and well … the correction begins.

That's why Prop 13 in CA is/was so popular.https://en.m.wikipedia.org/wiki/1978_California_Proposition_13

It still is. It’s the only reason retirees can remain in their homes.

 

[JohnL]

Maybe but just too much money/cheap money.

Only money that fits that description is other people’s money…

I really do think the pendulum will swing back away from remote work. Omicron is delaying this swing, obviously. But it is a lot tougher to maintain cohesiveness, culture, teamwork, career development in a mostly remote environment. Starting to see the signs of that in my company. And we are international.

Only two years ago, the trend was to inner cities. I think that will revive. But there will likely still be enough money around for resort area homes.

 

[ScotsSkier]

The issue of property valuations, property taxation and retired peoples is a big deal sometimes. Seniors who have lived in their home for 30 or 40 years, raised a family, being forced out because they happened to have chosen wisely in a good area and have seen their homes appreciate a great deal. Now they have significant taxation burden and very little income to combat it. I don't know what the solution is. I think it's somewhat unethical to force seniors to leave their homes for this reason. I don't know how you build a system to prevent it without pissing off someone else.

Easy, remove the education spend portion of property taxes for seniors.....it is over 505 of my tax bill here...

 

[Wasatchman]

Property taxes aren't just based on home values. It's set based on the amount the city/county needs and then the portion each home pays is allocated based on assessed property valuation. I think lots of people lose site of the importance of the city/county budget's influence on property taxes and relative house price appreciation/depreciation versus others in the city/county. The biggest component of my property tax increases the last five years isn't due to my home value increasing per se, but because the school district needed more money to rebuild or build new schools.

 

[Uncle-A]

Yeah my buddy's mum is living in a house worth $2m or so paying $14k in property tax a year. Fortunately she's well-heeled and can deal with it but lots aren't. She just happens to live in a skyrocketing neighbourhood and he's vehement that she should be given tax breaks. Part of me is, yeah..for sure. Part of me is, we frame property taxes based on valuation, not the cost of actually servicing the lot. Soo.... It sucks.

14K taxes for a 2M home, that is cheap I am close to that on a .5M house but that is a NJ issue.

 

[scott43]

14K taxes for a 2M home, that is cheap I am close to that on a .5M house but that is a NJ issue.

Yeah the overall taxation can be different. Typically our provincial and federal income tax takes about 25-35% of your income. So our property taxes come out lower. And our corporate property tax is higher than residential. Shell game.

 

[Uncle-A]

Yeah the overall taxation can be different. Typically our provincial and federal income tax takes about 25-35% of your income. So our property taxes come out lower. And our corporate property tax is higher than residential. Shell game.

We have tax brackets and depending on income some are higher than yours and some are lower. You are correct it is a shell game.

 

[Pat AKA mustski]

Shell game or not, those taxes have a direct effect on rental properties and are a big part of the reason that resort towns are struggling to find employees right now. They can’t afford to live there even IF they could find an available property for rent.

 

[Bolder]

Heck, I started this darn thread, have followed it, and I've got to say, I feel I know less about what is going on and where it is headed now than when I started it.

We have been in the process of deciding whether (and where) to buy a second home. Even though we live in France, the issues are the same: What do we want the rest of our working lives to look like? I've got 12-17 years to retirement; my wife has 20-25, but our jobs (communications) have now become almost completely portable.

Our original plan, interrupted by the first wave of covid, was to buy a pure second home in the Alps that we'd rent out for 10-12 weeks and spend 6 weeks there ourselves, so we were more interested in rentability than, say, whether we could retire there. But now the equation has changed: We can work anywhere and inflation is chewing up the value of our cash/maturing bonds. So we feel a bit of urgency, especially as we've seen values go up 25% plus in areas that were stagnant for years. France is just discovering telework so I don't think we'll see values go down anytime soon. There's a lot of headroom here for second home values, especially outside of the mega-resorts like 3V.

I think the bottom line is that you shouldn't stretch to buy a second home because it can be very hard to liquidate. The markets are just so unpredictable. My parents bought a place on the Outer Banks in the early 80s and there were literally entire decades where the market just stagnated. My mother decided to sell in 2019 because of declining health and a lack of interest from me and my brother in buying her out.

Then after a series of serious hurricanes/evacuations topped off with covid, I thought for sure the value would go down. But no. The property sat for a year with no takers, then went for over asking/cash in the middle of a pandemic.

 

[Jim Kenney]

We have been in the process of deciding whether (and where) to buy a second home. Even though we live in France, the issues are the same: What do we want the rest of our working lives to look like? I've got 12-17 years to retirement; my wife has 20-25, but our jobs (communications) have now become almost completely portable.

Our original plan, interrupted by the first wave of covid, was to buy a pure second home in the Alps that we'd rent out for 10-12 weeks and spend 6 weeks there ourselves, so we were more interested in rentability than, say, whether we could retire there. But now the equation has changed: We can work anywhere and inflation is chewing up the value of our cash/maturing bonds. So we feel a bit of urgency, especially as we've seen values go up 25% plus in areas that were stagnant for years. France is just discovering telework so I don't think we'll see values go down anytime soon. There's a lot of headroom here for second home values, especially outside of the mega-resorts like 3V.

I think the bottom line is that you shouldn't stretch to buy a second home because it can be very hard to liquidate. The markets are just so unpredictable. My parents bought a place on the Outer Banks in the early 80s and there were literally entire decades where the market just stagnated. My mother decided to sell in 2019 because of declining health and a lack of interest from me and my brother in buying her out.

Then after a series of serious hurricanes/evacuations topped off with covid, I thought for sure the value would go down. But no. The property sat for a year with no takers, then went for over asking/cash in the middle of a pandemic.

Interesting post especially because even though it's from a European perspective, it's not much different from what many of us would conclude in the USA.

Most reports I've following in the media seem to say real estate will continue to be a sellers market for several years ahead. But about a month ago I had a talk with a friend who is a mortgage lender. He was all doom and gloom and said that when all the mortgage forbearance ends in the USA it will cause a downturn in real estate with a flood of houses entering the market. He also thought this crisis would also negatively impact the stock market. Bottom line, none of us really know what's going to happen and that was before the wild card of the pandemic hit the scene.

 

[Uncle-A]

As long as the Fed keeps the interest rates low the housing market will be robust. It is forecasted that the Fed will raise rates a quarter point three times in 2022 in an attempt to slow the inflation. Time will tell if that will slow the housing market. I don't think it will have a big impact on housing as much as they want. They may have to go higher than a quarter point to slow it down.

 

[newfydog]

We have been in the process of deciding whether (and where) to buy a second home. Even though we live in France, the issues are the same: What do we want the rest of our working lives to look like?

Never easy decisions. We once moved a chunk of money to France and spent two months looking at houses. Ended up just renting the same house for some of the off season every year for 12 years. We negotiated some garage space for bikes etc and it worked out well for both parties. I've got to say though, buying a house in France is a bit more complicated.

 

[Uncle-A]

Never easy decisions. We once moved a chunk of money to France and spent two months looking at houses. Ended up just renting the same house for some of the off season every year for 12 years. We negotiated some garage space for bikes etc and it worked out well for both parties. I've got to say though, buying a house in France is a bit more complicated.

Is that the same for locals as well as foreigners or is it the locals giving them a difficult time?

 

[newfydog]

Is that the same for locals as well as foreigners or is it the locals giving them a difficult time?

Just bureaucracy, tax rules, title work etc. Complicated for everyone.

 

[Pat AKA mustski]

Our original plan, interrupted by the first wave of covid, was to buy a pure second home in the Alps that we'd rent out for 10-12 weeks and spend 6 weeks there ourselves, so we were more interested in rentability than, say, whether we could retire there. But now the equation has changed:

That is exactly the discussion we had. For years we looked at Reno - skiing Tahoe- and it was the plan. Then we fell in love with Taos. We had an offer in on a condo when America shut down for “14 days to flatten the curve” which extended on and on. We already have a property in a small town and realized that we want the amenities of a city but close to skiing. So we are now looking forward to wintering in Reno!

 

[newfydog]

Here's an Interesting post from a fly fishing board I frequent:

"OK" I know this may seem odd but after sixteen years in Bozeman, Mt. my better half and I are considering moving. "Boze Angeles" has become completely blown out. It's over here. Not the town I was introduced to in the early eighties. Way too many people and development. Development here has become explosive. Developers are crushing this place. The costs are off the charts. An example is the fact that our home has more than doubled in value in just eight years. Taxes and traffic too. The loss of that small town feel have caused us to consider a move. I mean it has gotten off the charts here. The recourses like fishing, hunting, hiking, skiing etc. are being overrun. It no longer is " The Last Best Place".

Just like Bend, I'm sure for every person bailing out, two replacements arrive.

 

[MikeW Philly]

Here's an Interesting post from a fly fishing board I frequent:

"OK" I know this may seem odd but after sixteen years in Bozeman, Mt. my better half and I are considering moving. "Boze Angeles" has become completely blown out. It's over here. Not the town I was introduced to in the early eighties. Way too many people and development. Development here has become explosive. Developers are crushing this place. The costs are off the charts. An example is the fact that our home has more than doubled in value in just eight years. Taxes and traffic too. The loss of that small town feel have caused us to consider a move. I mean it has gotten off the charts here. The recourses like fishing, hunting, hiking, skiing etc. are being overrun. It no longer is " The Last Best Place".

Just like Bend, I'm sure for every person bailing out, two replacements arrive.

From a ski resort perspective I feel like this is almost inevitable these days. We really need more resorts open in the US To even have that.

Small towns feels exist still? yes. Near Ski resorts? Can’t think of where. not sure there is any ski town in the US that the same couldn’t be said.

Although it might be worth calling out the home price piece as almost being the norm. Median home price in 2012 nationally over $171k to $375k today (probably higher once q4 numbers come out).

One thing I had thought about brining up early though in my original bump of this thread was zoning laws. For east/west coasts one of the primary driver of housing costs increase is zoning laws. There are ways to bring cheaper homes on market - zoning is a big influence. I can’t imagine it’s not worse in those ski towns but maybe not?

 

[Sibhusky]

An example is the fact that our home has more than doubled in value in just eight years.

Mine has doubled in value in 16 months. That just tells you that prices down there have been high for years.

I don't think we have much of the increase based on zoning laws, but the sheer proportion of land that is federal, state, or covered by conservation easements, which is happening at an increasing rate. For instance, the logging company land that surrounds me we always worried would be turned into tract houses, is now all under a conservation easement. Most of the land that is still private is on the valley floor. And even some of those farms are selling their development rights to conservation entities. So there's not much population, but there's not as huge an amount of developable land as you might think. Flathead County has a history of allowing anyone to pretty much do anything and I think that's why folks have been acting outside of zoning to protect land, because the zoning pretty much does not.

This leads to a lack of affordable housing, although water quality might be getting protected.